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Fertilizer Shortage Will Drive Global Food Prices Higher as Ukraine War Drags On

The UN estimates that the war alone could push global food prices up 22 percent.

A tractor sprays stone dust in a field at the Vargem Dourada farm in Padre Bernardo, Goias State, Brazil, on May 19, 2022.

Across the country, people are struggling to purchase nutritious food as global inflation takes root. Low-income people already spend a disproportionate proportion of their income on groceries.

The U.S. Department of Agriculture estimates that between April 2021 and April 2022, food prices increased by an average of 9.4 percent. But that includes restaurants prices, which increased at a slightly lower clip than grocery prices. Grocery and supermarket prices, by contrast, in April were fully 10.8 percent higher than in the previous year. The department’s Economic Research Services estimates that these prices will increase a further 8 percent this year.

This isn’t just an American problem. Globally, the disruptions to supply chains triggered by the pandemic, the rolling environmental catastrophe of climate change, and the war in Ukraine — which has bottled up millions of tons of vital supplies of wheat in blockaded Ukrainian ports and also led to a massive shortage of fertilizer — have combined to wreak havoc on food markets. The UN’s Food and Agriculture Organization has, in recent months, recorded record-high prices around the world for cereals, dairy products, meat, sugar, and vegetable oils, among other food products. Since Russia and Ukraine between them account for nearly a quarter of the world’s wheat exports, economic embargoes against Russia, combined with Russia’s blockade of Ukraine, risk a global food calamity on a scale not seen in decades.

Indeed, the UN estimates that the war alone could push up global food prices by a jaw-dropping 22 percent. It also estimates that many countries, including a large number in Latin America, Eastern Europe and Asia, receive up to 30 percent of their fertilizer supplies from Russia. The food security of these countries now is at risk of becoming collateral damage of the international efforts to isolate Russia from the global economy as a punishment for its actions in Ukraine. Shortages of fertilizer have led to soaring prices; some forms of fertilizer are now selling on the global market at far higher rates even than in 2008, when international markets across the board experienced massive price swings as the financial system began the swoon that would lead it to near-collapse. And as fertilizer prices rise, domestic agricultural production in many countries will take a huge hit. That hit will, of course, come just as the import market for food staples is also under unprecedented stress.

In countries such as Egypt, which import roughly half of their wheat from Ukraine and Russia, the prospect of hunger and even bread riots is now all too real. Last month, Egypt negotiated a deal to secure Ukrainian wheat exports via rail shipments into Poland, and, from there, via ship to Egypt, but it’s by no means clear that the movement of grain by rail will be of a scale necessary to plug the gaps caused by Russia’s blockade of Ukrainian sea ports.

In a normal year, Lebanon imports most of its wheat from Ukraine, according to the UN. More than 90 percent of Somalia’s wheat imports come from Ukraine and Russia. Almost all of Eritrea’s wheat imports come from these two countries, along with more than 85 percent of Turkey’s wheat imports. And the list goes on. The scarcity caused by the war, combined with the soaring prices, will, inevitably, push many of the world’s poorest, most vulnerable people further into insecurity and hunger.

Last year, the Global Report on Food Crises found that 193 million people spread across more than fifty countries were “acutely food insecure.” That was a staggering 40 million more than in 2020, which in turn was higher than the pre-pandemic numbers. The 2022 report warns that the world’s food situation is likely to further deteriorate due to Russia’s invasion of Ukraine.

This won’t immediately translate into mass hunger or food shortages in the U.S. The food distribution system in this country — combined with the massive, life-saving presence of the Supplemental Nutrition Assistance Program (SNAP) and a well-oiled food bank and food pantry distribution system — is too robust to see mass food shortages anytime soon.

But that doesn’t mean that millions of Americans aren’t suffering tremendous economic dislocation as their weekly grocery bills continue to rise. Meat prices in particular have been spiking over the past couple years: The USDA estimates beef prices could rise by an eye-popping 16 percent this year alone. Poultry prices will likely rise by more than 12 percent. But many other food staples are soaring in price as well: the price of eggs will, the USDA estimates, increase by 11 percent, and fresh fruit by more than 10 percent.

For middle class people, these price increases are an annoyance, but a manageable one. After all, most Americans, accustomed to endless supplies of cheap things to eat, spend less than 10 percent of their total income on food. But people in the bottom quintile of earnings in the country spend far more — close to 40 percent of their pre-tax income — on buying groceries. This is closer to what an average American at the start of the twentieth century was spending on food than to what an average American in the third decade of the twenty-first century spends on groceries.

Historically, soaring food prices have often served as triggers, or predictors, for political upheaval. It was, for example, inflation in the bread markets that helped create the conditions for the French Revolution in the years leading up to 1789. The United States is already in turmoil politically. Massive spikes in food prices this year will only increase the political volatility. That could, of course, push more Americans in a progressive direction, building support for income subsidies, progressive tax policies and the like.

However, discontent could also drain into the pool of right-wing populism, the politics of resentment and of scapegoating out of which former President Trump emerged, a mantle that an increasing number of hard-right politicians are now claiming as their own. Low-income families are already experiencing soaring fuel and housing costs while facing real and immediate economic pain because of rising food prices. Daily life is, for them, already an economic high-wire act, with every unanticipated expense a potential crisis forcing them into a fall. High food prices exacerbate this sense of economic insecurity.

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